Details of state budget bill emerge
SPRINGFIELD – A major tax increase is off the table, and the votes aren’t there for drastic spending cuts. That leaves Illinois officials trying to paper over a $13 billion deficit by borrowing money, ignoring bills, and trying an array of financial gimmicks.
Some of these ideas have been around for years, rejected again and again as bad policy.
Others are “one-time” emergency measures that are being brought back around for a second or third time. Some blatantly push the state’s financial problems onto other groups.
Even the Democrats putting together the budget call it a “piecemeal” plan that shows how far Illinois has fallen.
“We thought we had met the depths of how low we can go last year. It certainly has played out that we can get even lower,” Sen. Donne Trotter, a key Democratic budget negotiator, said Thursday.
Here’s a look at the ideas that Democrats — Republican lawmakers have largely been shut out of budget talks — are considering as they try to wrap up on May 7:
Borrowing money
Illinois is supposed to make a $3.7 billion payment to the pension systems for state workers, downstate teachers and more. Illinois doesn’t have the money, so Democrats are looking at various options for borrowing the money, which they also did last year.
“Last year it was an emergency. This year it looks to me like it’s a habit,” said Rep. Jack Franks, D-Marengo.
Borrowing money requires a super-majority, which would mean at least one Republican vote in the House.
Skipping payments
Two pension borrowing measures fell far short of a super-majority in House votes Wednesday. That has inspired discussion of simply skipping this year’s contribution to the pension systems. That has been done in the past, and it played a part in the pension systems’ financial troubles — a long-term funding gap of roughly $80 billion.
Critics say skipping another payment would make the problem worse, perhaps even forcing the pension systems to sell assets so retirees can keep getting their checks.
Delaying payments
Many people and groups help deliver state services. Doctors see Medicaid patients. Clinics treat drug addicts. Home-care services clean homes for senior citizens or help people with disabilities. All are supposed to be paid by the state for their work.
But the state doesn’t have the money to pay its bills on time. It’s making groups wait months to be reimbursed, leaving them to figure out how to pay their workers, landlords and electric bills. The budget plan under consideration anticipates having about $6 billion in overdue bills at the end of the fiscal year.
Letting Quinn decide
Legislators may give Gov. Pat Quinn new power to cut state spending or tap into special funds as he sees fit. Quinn’s office says he would have discretion to cut wherever he thinks is appropriate, up to a total of $400 million.
Raiding funds
State government has hundreds of special-purpose funds supported by fees on particular groups. Nurses pay fees to a fund that covers the cost of licensing nurses, for instance. State officials have gotten into the habit of dipping into these funds and taking any excess money.
The latest proposal is to give Quinn sweeping authority to borrow money from these funds. His office says he expects to take about $1 billion and would have to repay it within 18 months. Skeptics question whether the funds would ever get their money back.
Granting amnesty
The state would offer people who owe back taxes a chance to pay their debt without any penalty. Backers say it would bring in from $100 million to $250 million. A related idea to go after overdue state fees might produce an additional $150 million.
Critics worry people will think they can skip paying their taxes and avoid any punishment by waiting for the next amnesty.
Selling future revenue
Illinois gets about $300 million a year from the settlement of a national tobacco lawsuit in 1998 and the money will keep flowing for the next 15 years. Officials basically want to sell nearly half of that future money for a $1.2 billion check now.
Rep. Mark Beaubien, a Republican budget expert from Barrington Hills, said the $300 million a year is already allocated to various state programs. Giving up a chunk of that for a one-time check would just create a new budget hole, he said.
Taxing cigarettes
The state tax on a pack of cigarettes would jump by $1, to $1.98. Supporters link the proposal to school funding and to health, portraying it as a way to simultaneously increase revenues and help people. They say the tax would produce $200 million and federal matching funds would raise the total to $320 million.
Opponents fear it would drive many smokers to buy their cigarettes, along with gas and groceries, across the state border.
Raising taxes
In March, Quinn proposed raising income taxes by one-third to generate about $2.8 billion a year. Legislators have ignored the idea ever since and say it won’t be part of the final budget.
But Quinn insists his tax increase isn’t dead yet.
Cutting costs
Quinn’s budget proposal was supposed to include about $2 billion in spending cuts, with $1.3 billion coming from education. The plan now coming together would largely restore the education cuts.
That should leave about $700 million in spending cuts, from a base of about $32 billion. But it’s not clear how much of that cost-cutting remains.
Quinn’s office did not respond to repeated requests for the information. Legislators said they didn’t know or doubted there would be any serious cuts at all.
